Wednesday, December 23, 2015

CAFC Deems Section 2(a) Disparagement Provision Unconstitutional

The U.S. Court of Appeals for the Federal Circuit, after an en banc hearing, has deemed the disparagement provision of Lanham Act Section 2(a) unconstitutional because it violates the Freedom of Speech Clause of the First Amendment. Writing for the majority, Circuit Judge Kimberly A. Moore stated: "The government regulation at issue amounts to viewpoint discrimination, and under the strict scrutiny review appropriate for government regulation of message or viewpoint, we conclude that the disparagement proscription of § 2(a) is unconstitutional." The CAFC therefore vacated the TTAB's decision that had affirmed a refusal to register the mark THE SLANTS for "entertainment in the nature of live performances by a musical band." In re Tam, 117 USPQ2d 1001 (Fed. Cir. 2015) [precedential].

The court observed that federal registration confers significant benefits on a trademark owner, benefits that are not available when the mark is not registered. A federal registrant has a right to exclusive nationwide use of the mark where there was no prior use by others. A registered mark is presumed valid and use of the mark may become incontestable after five years. The registrant may enforce the mark in federal court and may recover treble damages for willful infringement. He may obtain the assistance of U.S. Customs and Border Protection in restricting importation of infringing or counterfeit goods, and may qualify for a simplified process for obtaining recognition and protection of his mark in countries that have signed the Paris Convention. And registration provides a complete defense to state or common law claims of trademark dilution.

Many of the Lanham Act's provisions that bar registration concern "deceptive" speech and do not run afoul of the First Amendment. Section 2(a) is a "hodgepodge" that includes restrictions "based on the expressive nature of the content, such as the ban on marks that may disparage persons or are scandalous or immoral."

The court found that Section 2(a) is "a viewpoint-discriminatory regulation of speech, created and applied in order to stifle the use of certain disfavored messages. Strict scrutiny therefore governs its First Amendment assessment."

The Government did not argue that the disparagement provision survives "strict scrutiny" but rather contended that Section 2(a) does not implicate the First Amendment at all. It contended that Section 2(a) is immune from First Amendment scrutiny because it prohibits no speech; that trademark registration is government speech, and thus the government can grant and reject trademark registrations with out implicating the First Amendment; and that the provision merely withholds a government subsidy for Mr. Tam’s speech and is valid as a permissible definition of a government subsidy program. The court rejected all three arguments.

The court held that "the disparagement provision of §2(a) is unconstitutional because it violates the First Amendment."

11 Comments:

I agree with the result, but must note one error in the majority opinion. It states that the right to use an encircled "R", which is an incident of trademark registration, does not convert private speech (the trademark use) into government speech, and analogizes to the use of the copyright symbol, an encircled "C". The court states that a copyright registration allows the copyright owner to affix the "C" notice, but this is incorrect; the "C" can be used even if the work on which it appears is unregistered.

While the administration of 2 (a) disparagement is problematic when one person's pointed message differs from a Victorian Examining Attorney's view, nothing in denial of a registration implicates free speech. Tan remains free to call his band what he likes. Indeed, like it being acceptable for one to tell ethnic jokes about one's own group, I would have given Tan the registration. The one exception, I believe, is that if one is selling jewelry with karats marked, one is required to have a Federally registered trademark. Arguably, denial of registration could restrict your commercial activity. As far as I know, the Gold Stamping Act is the only statute that requires registration.

It was obvious in Judge Moore's questioning during the oral argument that her understanding of the copyright system (and trademarks, for that matter) is exceedingly poor. The opinion is poorly written and seems in direct conflict with Supreme Court case law on license plates. I hope that the 4th circuit ignores this opinion (as the CAFC did the 4th circuit) and the Redskins mark remains cancelled.

John, regarding "give it to Tam" and the larger reappropriation doctrine some advocate, you rightly pointed out the problem with subsequent assignment of the mark. But if the disparagement portion of 2(a) were still standing and the reappropriation doctrine became law, there are additional issues. Would an examining attorney have to decide if an applicant were black enough to register a mark containing NIGGERZ, Asian enough to register SLANTS, Jewish enough to register HEEB? Would the examining attorney have to decide by looking at a photograph of the black guy, or review a declaration from the Jewish applicant's rabbi? This nightmarish can could be kicked down the road, say, if the USPTO just required the applicant in that situation to sign some generic statement like "I certify that I am a member (or self-identify as a member?) of the group disparaged by the applied-for mark", sort of like the can is kicked re: use in commerce. But then later, in the inter partes context, the same issues would crop up.

I just don't see how this decision will stand - unless SCOTUS goes against its own precedent. SCOTUS has noted that trademarks are purely commercial speech, it has also noted that commercial speech is afforded less protection than for some other forms of speech, and thus (if I remember correct) commercial speech is not subject to strict scrutiny. Nevertheless - even were it subject to strict scrutiny, how is it not a significant government interest to prevent potential racial conflict that results from the use of ethnic slurs in a multicultural society. One only has to look at the turmoil of the past year to see that racial harmony in the US is not in a good place, and it could be further harmed by allowing the registration (and thus use) of disparaging marks (I doubt there would be a ton - but all it takes it one, you just never know).

As far as the definition of a TM not including any mention of 'speech' - what do you consider 'words'? And don't names, symbols, or devices used to identify products by consumers convey something to the consumers? Seems like speech to me, and a pretty clear mention of it to boot.

The CAFC got the right result, but relied on the wrong reasoning. A refusal to register a mark does not abridge the freedom of speech. On the other hand, forcing political correctness upon private sector branding decisions, is not a legitimate regulation of interstate commerce.

Presumably we will not be seeing any disparagement rejections in the near future, but what if the 4th Circuit rules tomorrow that the provision is constitutional. I expect SCOTUS will resolve the issue eventually, but which court would the Board heed in the interim? I suppose the Federal Circuit for obvious reasons, but it presents a unique circuit split question.